Wage hikes | Pay reaches seven-year high as employers struggle with skills shortages

Pay reaches seven-year high as employers struggle with skills shortages

Emerging skills shortages in the UK jobs market are starting to drive up wages, according to research compiled by the Chartered Institute of Personnel and Development (CIPD).

The Guardian reports that, after a “lost decade” of lethargic growth since the financial crisis back in 2008, privately-owned businesses have anticipated an increase in annual pay by 2.5% on average in 2019 – which is up from two per cent at the end of 2018.

Furthermore, the research found that nearly three quarters of the 1,254 employers surveyed were finding it increasingly tough to fill vacancies within the first quarter of 2019. The manufacturing industry was dubbed as the sector harbouring the greatest difficulties when recruiting.

Jon Boys, Labour Market Economist at the CIPD said that the employment market has showed signs that it is ‘surprisingly robust’. He added:

“There are skills shortages and companies are struggling to get the talent they need – that’s what’s driving this increase in pay growth we’re seeing.”

Minus growing concerns about the future stability of the British economy following an anticipated ‘no-deal’ Brexit, it seems that unemployment has hit its lowest rate since the mid-1970s.

Last month, the BBC reported that 32.54million Brits are now in work, with the number of job vacancies rising by 10,000 to a record high of 853,000.

David Freeman, ONS Head of Labour Market told the publication: "The number of people working grew again, with the share of the population in work now the highest on record.

And, figures from the Office for National Statistics have revealed that nation-wide pay growth has peaked to the highest level in a decade as companies propose higher pay to attract new recruits.

Statistics have outlined that the number of unemployed individuals per job vacancy has dropped to 1.6 – down from 5.8 in 2011.

Last year, The Independent reported that several UK firms are finding it complex to recruit the staff that they need after slumping net migration from the EU.

Previous research from the CIPD revealed that 40% of employers had more problems filling vacancies than they did last year, particularly after record numbers of people fleeing the UK – ONS data revealed.

And it seems that skills shortages have worsened in numerous sectors which traditionally rely on an influx of non-UK labour. The CIPD cite these sectors as IT, transport and construction.

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